Good morning. My name is Jessica and I'll be your conference operator today. At this time I’d like to welcome everyone to the Royal Gold Fiscal 2011 Fourth Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. Karen Gross, Vice President and Corporate Secretary you may begin your conference.

Karen Gross

Thank you operator and hello everyone. Welcome to our fiscal 2011 fourth quarter and year end conference call. The event is being webcast live and you will be able to access the replay of it on our website. Also, on the website you will find our release detailing our financial results.

As always, this discussion falls under the Safe Harbor Provision of the Private Securities Litigation Reform Act. A discussion of the company's current risks and uncertainties is included in the Safe Harbor statement in today's press release and is presented in greater detail in our filings with the SEC.

Participating on the call today are Tony Jensen, President and CEO; Stefan Wenger, Chief Financial Officer and Treasurer; Will Heissenbuttel, Vice President Corporate Development; Bill Zisch, Vice President in Operations; and Bruce Kirchhoff, Vice President and General Counsel.

A Q&A will follow our comments. We will also be discussing the company's free cash flow, which is a non-GAAP financial measure. There is a free cash flow reconciliation in today's release.

Now, I'll turn the call over to Tony.

Tony Jensen

Good morning and thank you for joining us today. Fiscal 2011 was an outstanding year for Royal Gold. We achieved record revenue, free cash flow, and net income and continue to execute on our long term growth plan by adding another high quality long life royalty to our portfolio. During the year, we closed the Mt. Milligan transaction, where we acquired the right to 25% of the payable gold produced from this project in British Columbia, and we also completed a transaction to acquire an additional NSR sliding-scale royalty on the Pascua-Lama project in Chile bringing our royalty interest to 5.23% and gold prices above $800 per ounce.

Our total property count now stands at 184 of which 36 are producing properties and 21 are development properties. In addition, we recently announced a transaction of Seabridge Gold on the KSM project that allows us an excellent entry point into one of the largest undeveloped gold deposits in the world. I'll speak more about this later in the call.

We also saw growth in reserves during the year with gold reserves subject to our royalty interest increasing 7% to 83.9 million ounces and silver reserves increasing 4% to 1.4 billion ounces. More importantly, we consider the impact of these reserves on Royal Gold by calculating the royalty ounces which were simply the reserves subject to our royalty interest multiplied by the applicable royalty rate.

On a royalty basis then we estimate that reserves is 7 million gold equivalent ounces are attributable to our interest which represents an increase of 26% over the prior year largely due to Mt. Milligan transaction.

Our growing revenue stream for fiscal 2011 was primarily driven by production growth at our cornerstone properties, solid production from our other key royalties and higher metal prices. Revenue from three of our cornerstone properties including Peñasquito and Andacollo Voisey's Bay totaled $98 million or 45% of total revenue for the year.

Now, Stefan Wenger our CFO will review the financial highlights for both the year and the quarter in more detail, and after that Bill Zisch, our Vice President of Operations will provide an update on certain producing in developed royalties. Stefan?

Stefan Wenger

Thank you Tony and good morning everyone. For the fiscal year we had record revenue of $217 million, an increase of nearly 60% over revenue of $137 million in fiscal 2010. Net income increased 232% to $71.4 million or a $1.29 per share compared to $21.5 million or $0.49 per share for fiscal 2010.

Our free cash flow for fiscal 2011 was a record at a $190 million or 88% of revenues. This compares with a $100 million or 73% of revenues for fiscal 2010. Free cash flow was negatively impacted during the fiscal 2011 by higher production taxes of $9 million compared to $2.9 million in fiscal 2010.

Higher production taxes were associated with the increase in revenue at our Voisey’s Bay royalty which carries a production tax burden of 20% of revenues. Before production taxes our free cash flow increased to 92% of revenue during fiscal 2011 demonstrating the strong operating efficiency of our royalty model.

Working capital as of June 30 was a $140 million including cash from receivables on the balance sheet totaling a $163 million. We also had a $125 million in additional liquidity available from our revolving credit facility to fund future growth. We ended the fiscal year with the $226.1 million in debt under our credit facilities.

I would like to briefly comment on our income statement presentation as we’ve changed a few things this year. For fiscal 2011 we broke out our production cash expense into a separate line item on the income statement as production taxes have become a larger component of our cash costs.

In addition going forward, all of our corporate costs including operating cost associated with managing our existing portfolio as well as business development expenses and non-cash compensation will all be include in the G&A line item.

For fiscal 2011, our total cash operating expenses net of production taxes, were approximately $14.6 million compared to $12.2 million in the prior year. The increase in cash expenses was associated with higher corporate costs including accounting tax and legal fees primarily resulting from the restructuring activities we completed during fiscal ’11 resulting from the IRC acquisition.

Our average DD&A rate for the year on a gold equivalent ounce basis was $426 per ounce compared to $430 per ounce in the prior fiscal year. For fiscal 2012, we expect DD&A expense to be in the range of $400 to $450 per royalty ounce. One final highlight for fiscal ’11 was the amendment of our credit facility with HSBC and Scotia resulting in improved long term financial flexibility and the financial capability to continue to pursue growth opportunities.

Moving on to the fiscal fourth quarter, we had a record quarterly revenue of $59 million or 46% increase over the revenue of $41 million for the comparable quarter. Net come was $21.7 million or $0.39 per share compared with $10.5 million or $0.23 per share for the prior year period.

We also have a record free cash flow of $51.6 million or 87% of revenues compared to $35.1 million or 86% of revenues for the prior year period. If you eliminate production taxes, free cash flow as a percentage of net income for the quarter was 92%.

In summary, we had another very successful year of financial growth and record performance. We’re beginning fiscal 2012 with a strong balance sheet. The flexibility within our balance sheet combined with our growing cash flows positions us well for the future.

Now, I’ll turn the call over to Bill Zisch.

William M. Zisch

Thank you Stefan and good morning everyone. I’ll begin by describing the overall performance of our portfolio of producing properties and then provide an update on a few of our development properties. First of all, in comparing our production with the comparable prior year quarter revenues from our producing portfolio increased 46% as Stefan mentioned. Comparing production with the prior quarter that is our fiscal third quarter of 2011, revenue from production increased 7%.

Quarterly price increases for gold and silver of 9% and 21% respectively offset other metal prices that trended down 2% to 10%. Key properties with production below the prior quarter included Leeville, Andacollo, Las Cruces and Voisey’s Bay. At Leeville new mine executed a scheduled one month outage of the Mill 6 roster. Andacollo was slightly below the previous quarry’s production as they continue to work through over hardness issues although shortfalls were partially offset by increased concentrate recoveries. Inmet continued to maintain improvements related to oxygen supply by installing and commissioning new oxygen distributors at its Las Cruces mine. The decrease in quarter-over-quarter sales was primarily a function of a scheduled 16 day maintenance shutdown in June.

At Voisey's Bay, as expected, there were limited copper concentrate settlements during the quarter as the last shipments of copper concentrate were completed in the December 2010 quarter before the normal restricted shipping period from December to May arrived. Nickel shipments at Voisey's Bay, however, exceeded the prior quarter as the operation had increased production of nickel concentrates.

Key properties with production above the prior quarter were Peñasquito, Robinson, Dolores, Gwalia Deeps and Mulatos. At Peñasquito despite Goldcorp’s reduction in full year guidance they did continue to ramp up production with quarterly results that were 21% higher than the prior of third quarter. Guidance was reduced because they had not been able to sustain 130,000 ton per day throughput. Lower processing rates were due to lower than forecast pebble feet to the high pressure grinding roll circuit and slower than expected progress on the racing of the tailings dam in Bateman (ph). Higher grades and recoveries did offset some of the throughput shortfall and Goldcorp does expect to resolve throughput issues by the end of this year.

At Robinson, Quadra continues to work on improving production as they had reduced the congestion in the Ruth Pit and continue development of the secondary access ramp into the pit. Access to higher grade material at the bottom of the pit and additional haulage capacity are expected to increase production in the second half of the year. At Minefinder’s Dolores mine production was sustained at its improved level since initiating leaching of the stage two path. Of particular note at Dolores is the increase in silver production which exceeded the prior quarter by 23%. Gwalia Deeps which suffered unseasonable rain that impacted production in the previous quarter reestablished access to the higher grade Hoover Decline and exceeded the prior quarter production by 6%. At Mulatos, crusher throughput improved for the third consecutive month with stacked ore in June averaging a record 16,000 tons per day.

Moving on to our newest producing properties, Yukon Zinc’s Wolverine mine continued its ramp up with targeted design production expected by the end of this year. At Canadian Malartic, Osisko announced that in May they reached commercial production ahead of their previously scheduled August target. Ramp up is progressing well with an average throughput of almost 39,000 tons per day through mid June, moving them well along to achieve the design rate of 55,000 tons per day.

With regard to our development properties, I recently visited Thompson Creek’s Mt. Milligan project and was pleased to see their progress and the professional approach they are taking. The earth works for the plant, shop and administration foundations are complete. The concrete batch plant is ready to go and a significant portion of their steel has been delivered. Thompson Creek reported project spending to-date at 16% of the total project and they are targeting completion in the fourth quarter of 2013.

At Pascua-Lama, Barrick has stated they expect cost to increase to between $4.7 billion and $5 billion. A portion of this increase is associated with maintaining the mid 2013 production schedule, which is beneficial to us as a royalty holder. Additionally, Barrick has reported that revised gold production estimates for the projects have increased from 775,000 ounces to 800,000 to 850,000 ounces in the first full five years of operation.

Three development properties that have reached significant milestones include Kuchu (ph) Creek and Schaft Creek in British Columbia and the Meekatharra gold project in Western Australia.

At Kuchu (ph) Creek Capstone Mining recently completed a favorable feasibility study. Along with ongoing exploration, the focus of their development activities this year will be to carry forward the environmental and socioeconomic assessment process with the goal of obtaining all necessary permits for mine development by mid 2012. We hold a 1.6 NSR on this project.

In July, Copper Fox Metals released a 43-101 compliant report related to the resource estimation for their Shaft Creek deposit. One of the largest undeveloped copper gold molybdenum deposits in North America. They expect to complete a feasibility study by the end of this year. We have a 3.5% NPI interest in this property.

And in Western Australia, Reed Resources is conducting resource re-optimization and a feasibility study to recommence production in 2012 from their recently acquired Meekatharra gold project. We have a 0.45% to 1.5% NSR interest on various properties within this project.

With that I’ll turn the call back over to Tony.

Tony Jensen

Thanks for the update Bill. I’d like to turn now to our recent transaction with Seabridge gold announced in June where we acquired an option to purchase a 1.25% net smelt and return royalty on all of the gold and silver production from the KSM project in Northwestern British Columbia.

This part of the transaction, we purchased just over a million shares of Seabridge common stock for approximately $30 million. Holding the shares for minimum of nine months gives us the right to acquire the royalty at a future date by paying C$100 million.

Under the agreement we may also increased the royalty to a 2% NSR by providing an additional C$18 million private placement and Seabridge common shares prior to mid December 2012. In holding additional Seabridge shares for a minimum of nine months, and then paying an additional consideration of C$60 million if we choose to exercise this option.

So to summarize these options, in total we have the right to purchase a 2% royalty at KSM for a purchase price of C$116 million. The KSM project has proven and probable reserves of 2.2 billion tons containing 38.5 million ounces of gold, 10 billion pounds of copper and 214 million ounces of silver.

Once built, the economies of scale are expected to provide for low production cost in a robust production schedule for a long life. Seabridge’s preliminary feasibility study envisions annual precious metal production averaging 542,000 ounces of gold and 2.7 million ounces of silver over a 52 year mine life.

These features an advantage of being located in British Columbia fit well into our development portfolio as we layer in the next generation of growth. One more development to highlight during the recent quarter was the settlement of the Holt Mine litigation. As you know this dispute has been ongoing since November 2008 and I’m pleased to report that a final judgment has been made in a manner satisfactory to Royal Gold. We’ve now received all the royalty revenue due to us since all three started last year.

In closing fiscal 2007 was a milestone year as we transitioned from our revenue base from prior key assets to our new corner stone royalties. Looking ahead we anticipate further revenue growth as Andacollo, Peñasquito, Holt, Canadian Malartic, Wolverine and Las Cruces, all work to achieve full design capacities. We also look forward to significant construction progress at Pascua-Lama and Mt. Milligan which are scheduled to commence production in the second half of calendar 2013. We are proud to have delivered a decade of strong growth for our company and we are eager to build on that success.

Operator, that concludes our prepared remarks. We will be happy to take any calls or questions on the call if there were some.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Imaru Casanova from McNicoll, Lewis, & Vlak. Your line is open.

Imaru Casanova – McNicoll, Lewis, & Vlak

Hi guys, this is Ima Casanova at MLV. Congratulations in what was a solid quarter. I have just a couple of questions and what we might expect in the next couple of quarters at some of this key operations. In particular at Voisey's Bay do you guys have some guideline for us as to what to expect in the production there? We are seeing some variability there and I understand some of that has to do with the strike earlier and shipments etc. But, do you have any type of sort of sustained level guidance for both Nickel and Copper for us?

Tony Jensen

Good morning Ima. I am just going to ask Bill Zisch to respond to that question.

Bill Zisch

Hi Ima. Yeah, what we have seen over the last two quarters is about what we expect for them to be running out on a steady steep basis. Yeah, as you said, they did settle the strike. What they are doing now is operating at the level that they expect they will run through the 2013 period when their Long Harbor Project starts up. So what we are seeing now is about what you will see and as you mentioned and as we mentioned in the past, our shipping schedule would be a bit lumpy because of the constraints that they have but this last quarter was very representative.

Imaru Casanova - McNicoll, Lewis, & Vlak

Okay. So, now, copper was a lot lower this quarter compared to the previous quarter. Is there going to be somewhere in between them?

Bill Zisch

Again, what you will see is based on the shipping schedule, production last quarter was about 14 million pounds and then they didn’t ship any this quarter because they are constrained from that. So copper in particular you will see go up and down based on that shipping schedule.

Imaru Casanova - McNicoll, Lewis, & Vlak

Okay. All right. And then Andacollo, they are trying to get to the 55,000 tons per day target and there has been a bit of a delay there because of some of the issues with the ore. Have they given you an idea of when they think they are going to be able to get to the sign rate? I know they are also talking about further expansion, but as far as the original plan when do you guys think they are going to be there?

Bill Zisch

Yeah, Ima this is Bill again. They do have a plan they talked about several times that they are going to do including adding a small crusher to feed the pebble crusher. They are going to increase power to the SAG mill and they are going to install a 20,000 ton per day crusher, and they expect that crusher will be in by the end of the first quarter 2012, and that’s when they would be targeting, they are getting back up into their design levels when they get those three things done.

Tony Jensen

I guess just to add to that a small crusher to feed the pebbles is actually being installed this month in August and the power is coming I think next month. So there should be a little bit of incremental improvements I would imagine ahead of the larger pressure that Bill mentioned is going to come in production in the first quarter of 2012.

Imaru Casanova - McNicoll, Lewis, & Vlak

Got you. Okay. That’s helpful and let’s see. I take that you did record some revenues at Canadian Malartic for this quarter that they just reported. And I am assuming they were part of the other category. Can you give us – the production actually was there that you recognized from Canadian Malartic?

Tony Jensen

We are just looking whether we have that dollar figure or the production figure in front of us right now. Stefan do you have that?

Stefan Wenger

I don’t have it right now, but we can follow up on that.

Tony Jensen

Yeah. Happy to provide you with that. You are right, I assume the other categories are right now because it was just a partial ramp up in that prior quarter.

Imaru Casanova - McNicoll, Lewis, & Vlak

Right, yeah. Got it. And then last thing and then I'll let others ask some questions. Do you guys have your sort of own – and I know it would be sort of speculative right now. But, as far as a timeline for KSM regarding that western section that you’ve done, how do you guys see the time line of this project towards potential production in the future?

Tony Jensen

This certainly is the next generation of asset for us Ima. We are just at the – I should say Seabridge is at the pre-feasibility stage. At present, they are continuing to do some drilling to refine and improve the knowledge and potential grade of the deposit. They are also seeking a major partner and I think that’s one of the critical path items and they recognize that this is a very-very large project and we are going to need some help to put it forward. Having said all that then one needs to consider that the construction schedule I am looking at (inaudible) is a four year construction schedule as it’s originally envisioned.

So this is a project that awaits out on the horizon, but the way we structured the deal I think it gives us a chance now to put a whole bunch of cash up front and still have exposure to a huge deposit if and when it does come into production.

Imaru Casanova - McNicoll, Lewis, & Vlak

Indeed. Thank you very much guys.

Tony Jensen

Thanks Ima.

Operator

You next question comes from the line of Andy Schopick, a private investor. Your line is open.

Andy Schopick – Private Investor

Thank you very much. Tony, you just addressed at least part of my question about Seabridge because this is something that I’ve had some familiarity with and I certainly had discussions with Rudy Fronk going back several years. And he has always communicated to investors that the intention was to basically find a partner to sell the company and that the company had no desire or interest in commercializing of the mine. And my understanding is that the cost associated with bringing this project into commercialization have gone up fairly significantly. I mean we are talking a multibillion dollar type of project here. So I was wondering, the shares that you have purchased, those shares are registered free to be sold or if the company were to be acquired, you cashed out. I mean, I’m not sure what provision if any is in your agreement should they in fact decide to just sell the company at some negotiated price?

Tony Jensen

Yeah. Thanks for the clarification Andy. We have those one million shares, approximately one million shares that we own today. We have a commitment to hold those for nine months to perfect our option. If we were to liquidate those earlier than that then we would not be able to exercise the option at a later date. But, after the nine months we are free to do what we want with those shares. The same is true for the subsequent option, if we were to invest another C$18 million into Seabridge we have to hold those shares for a nine month period as well after we acquire them. So, but after that we are free to do what we want with them and of course the options then will last for a very significant period of time. They last I think for 60 days after the production announcement has been made, the construction decision has been made, that financing is in place and that permits have been received.

Andy Schopick – Private Investor

Tony, let me follow up. If the company were to be sold prior to the nine month period. Would your hand basically be forced to sell the shares and you would have no potential royalty participations?

Tony Jensen

Bill, do you have an answer to that question?

Bill Zisch

I don’t have it right with me. I can tell you that if the company is acquired the second tranche, in fact the company acquiring Seabridge have to give us a chance to bring private placement in their shares to take that opportunity.

.

Tony Jensen

I think that’s the response to your question, isn’t it Andy?

Andy Schopick – Private Investor

Okay. I want a follow up of briefly with Karen and Stefan. I think there is a page missing from the press release unless this was done deliberately. I was looking for the fourth quarter consolidated statement of operations and income, and I only see the full year presentation. Normally you do provide that the quarterly data and year-to-date figures.

Stefan Wenger

Andy this is Stefan. At the year-end we only provide the annual figures. When our 10-K comes out there will be a break out of the quarterly information and that will be out within the next week or so.

Andy Schopick – Private Investor

All right. So then we have to – you know, I didn’t notice this before, but basically I would have to go back and back in or back out the fourth quarter numbers from the nine months. Okay. Thank you.

Stefan Wenger

Yes. Thanks for the questions Andy.

Operator

(Operator Instructions) There are no further questions at this time. I’ll turn the call back over to the presenters.

Tony Jensen

Thank you Jennifer. Thank you all for joining us today. We very much appreciate your interest and continued support of Royal Gold. And we look forward to providing the K that Stefan just mentioned here in just a few days and updating you of the progress in our next quarterly conference call. Thanks very much.

Operator

This concludes today’s conference call. You may now disconnect.

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